ZhongAn CEO: Further opening up will benefit China’s insurance market

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Further opening up China’s insurance market will improve efficiency and the quality of service across the industry, Chen Jin, CEO of China’s first exclusively-online insurer ZhongAn Online, told CGTN on Tuesday.

In a keynote speech marking the opening of the Boao Forum for Asia Annual Conference 2018, Chinese President Xi Jinping said China will launch a number of landmark measures this year to significantly broaden market access for foreign investment, especially in the financial sector.

Focusing on the insurance industry, Xi said China will accelerate opening up the sector, at the same time easing restrictions on establishing foreign financial institutions in China and expanding their business scope.

The speech was welcomed within the industry, with Chen telling CGTN that wider market access will generate two benefits: increased efficiency and richer product portfolios.

China is gradually lifting a 50 percent equity cap on foreign insurance companies in joint ventures in China. This will give foreign investors more power in the domestic sector, according to Chen, who further added that reforms will allow overseas insurers to introduce more products into the Chinese market, especially in the fields of elderly care and healthcare.

ZhongAn Online P&C Insurance Co Ltd was established in 2013, with backing from Alibaba, Tencent and Ping An Insurance. The company has grown on a rapid scale since then, and launched a 1.5 billion yuan (238.7 million US dollars) IPO in Hong Kong last September.

Last November, China announced a timetable for easing restrictions on joint venture ownership: Foreign investors will be able to hold 51 percent majority stakes in Chinese joint ventures from 2020, and enjoy no limits at all after 2022.

Although further opening up will intensify competition, Chen said history has shown competition can make the industry flourish.

Foreign investors have had access to China’s insurance market since 2001, when China joined the World Trade Organization.

Technology is another key factor that boosts the industry, Chen said, noting heavy investment in technology and greater cooperation between traditional finance companies and fintech firms will be a major trend for the future.

Blockchain, AI, big data, Internet of Things and cloud computing are five key technological advances that are all being researched by China’s growing insurtech industry, according to a report by consultancy Oliver Wyman in December 2017.

The total revenue of China’s insurtech market reached 363 billion yuan (57.8 billion US dollars) in 2016 and is expected to surge to 1.4 trillion yuan (222.9 billion US dollars) in 2021, with a compound annual growth rate of 31.2 percent, according to data from Oliver Wyman.